A San Jose-based semiconductor startup that has been sued by Huawei for stealing trade secrets has responded in court documents, accusing the vice president of the Chinese firm of conspiring to steal its intellectual property, the Wall Street Journal reports. In court filings, CNEX Labs, which is backed by the investment arms of Dell and Microsoft, alleges that Eric Xu, who is also one of Huawei’s rotating CEOs, worked with other Huawei employees to steal its technology. patented.
The lawsuit, scheduled for trial June 3 in federal court in the Eastern District of Texas, began in 2017 when Huawei sued CNEX and one of its founders, Yiren “Ronnie” Huang, a former employee of the Santa Clara office of Huawei, for stealing its Technology and using illegal means to hunt down another 14 Huawei employees. CNEX filed a counterclaim the following year. Huawei has denied the startup’s allegations in court documents.
The lawsuit is occurring at a difficult time for Huawei. Last week, the Trump administration placed the Chinese telecommunications equipment maker (and the world’s second-largest smartphone brand) on a trade blacklist, which also signed an executive order that would prevent US companies from doing business. with Huawei. And other companies that you consider a threat to national security. As a result, several companies have suspended their business with Huawei, including Google, Qualcomm, Intel, and ARM.
The court filings indicated that after Xu directed him to analyze CNEX’s technical information, a Huawei engineer met with startup officials in June 2016, posing as a potential client. But then the engineer produced a report on CNEX’s technology and placed it in a database with information on competitors managed by Huawei’s chip development unit.
CNEX’s lawyers also say that Xu was aware of a partnership between Huawei and Xiamen University that was allegedly part of the scheme to steal the startup’s trade secrets. They claim that Xiamen obtained a memory card from CNEX in 2017 under a license agreement, saying it would be used for academic research. But CNEX attorney Eugene Mar said that “what was hidden from CNEX was that Xiamen was working with Huawei and had signed a separate agreement with Huawei to provide them with all of its investigative test reports,” according to the transcripts of the cut views by Wall Street Journal.
The information from the university study was later allegedly used for Huawei’s chip projects, including one that is expected to be released this year. Huawei’s lawyers refuted CNEX’s charges, claiming that the partnership between Huawei and the university did not involve reverse engineering or CNEX trade secrets and was aimed at designing database software rather than developing chips. A lawyer for Huawei said that Xu was part of “the chain of command that had requested” information about CNEX and that a CNEX document had been placed in the database of its chip development unit, but denied the allegations that something had been stolen.
CNEX co-founder Huang claimed in court documents that he offered to sell his intellectual property to Huawei when he started working at Futurewei, its research and development unit. Huawei rejected their offer, but then tried to get Huang to grant them their PI under an employee agreement, which Huang refused to sign, it claims. Huang left Futurewei in 2013 and founded CNEX Labs shortly after.